The recently released headline U.S Consumer Price Index (CPI) data came out to 5.0% showing it has gone below a 5.2% forecast. This, however, seems to suggest that the Federal Reserve has been putting in “working” efforts to reduce inflation.
The U.S. Department of Labor Statistics released the data at 08:30 Eastern Time (13:30 BST) on Wednesday, the headline CPI measures the raw amount of inflation within the country, which excludes the core CPI that measures inflation where goods with high fluctuations in value are removed. Additionally, the data represents a year-on-year (YoY) inflation to the average U.S. citizen.
An expert preview on the outcome of the data before it was released analyzed that the market will react positively if the data comes out below the forecast, and if otherwise, the market will react negatively.
Based on the outcome of the data, the market in April is said to be bullish, unless it is affected by a bearish external factor, due to the data being below the forecast.
Bitcoin is doing well from previous price levels, now eyeing the $35,000 level, which also holds a long-term CME gap that is yet to be filled. Experts analyze that the bulls’ first grip would be around the $32,000 resistance.
Truly, the week started off bullish for Bitcoin pushing through the $29,000 resistance that held the price for 24 days.
The released CPI data accounts for March 2023 and marks the lowest inflation reading for the U.S. counting from October 2021 which came in at 5.4%. The February data released in March came in at 6%.
Inflation reached 9.1% for June 2022 data and has declined since. Further, Moreover, the positive data suggests that the Fed is likely to be reaching its terminal rate and looking to pause rate hikes. Since March 2022, the Fed has been raising rates to tackle soaring inflation in the U.S.
A pause does not mean that the Fed will reduce rates, but it will allow them to assess whether they believe inflation is subsiding. The Fed, however, is targeting inflation to go down to 2%.
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